Clause 23 - Supply of electronic services in member States: special accounting scheme
Finance Bill
10:15 am
Mr Stephen O'Brien (Eddisbury, Conservative)
I am grateful, Sir Nicholas. I want to follow the correct procedure, but it would be sensible to discuss schedules with their relevant clauses. Whether that will be the theme as we discuss the Bill is for you and others to decide.
The schedule is technically interesting in that output VAT is at the UK rate on supplies to customers in the UK, but on supplies to customers elsewhere in the EU, the rate will be that in the customers' countries. Customs and Excise will collect output VAT, but pay it to another country. That seems straightforward, and it was as a result of representations from the Chartered Institute of Taxation that we tabled amendments Nos. 91 and 92 to schedule 2. I shall move them at the appropriate time, but will debate them now for the convenience of the Committee following your guidance, Sir Nicholas.
The Chartered Institute of Taxation believes that the text of paragraph 14(4) of new schedule 3B to the Value Added Tax Act 1994:
''Records must be made available electronically under sub-paragraph (3) above'',
should state:
''Records under sub-paragraph (3) above must be made available electronically.''
That may seem a minor change, but it would be helpful in clarifying and tidying up the drafting. The Committee is taking up the time of right hon. and hon. Members to try to ensure that the legislation is as good as possible, irrespective of whether we agree with it. In this case, we have no difficulties with the principles concerned.
On amendment No. 92, paragraph 22(7) of new schedule 3B to the Value Added Tax Act 1994 does not identify the UK provision giving effect to article 4(2) of the 13th directive. All Committee members will have latched on to that point and have it in the forefront of their minds. The Institute of Taxation states that it appears to be regulation 190 of the VAT regulations 1995, SI 1995/2518. That is a minor but important omission, which should be tidied up, and I simply seek the Minister's undertaking that if he is not minded to accept our amendments, he will return on Report with amendments to give proper legislative effect to them. If he cannot give such an undertaking, we shall have to register our displeasure when the amendment is moved formally.